Cordia Bancorp Inc. Reports First Quarter Results

MIDLOTHIAN, Va., May 7, 2014 (GLOBE NEWSWIRE) -- Cordia Bancorp Inc. ("Cordia") (Nasdaq:BVA), parent company of Bank of Virginia, reported a net loss of $284,000 or $(0.10) per share for the first quarter of 2014, compared to net income of $222,000 or $0.08 per share for the first quarter of 2013.

First Quarter 2014 Highlights

19% growth in total assets

11% growth in deposits

10% increase in full time employees

Acquisition of $26.5 million portfolio of student loans

Nonperforming assets continued to decrease to 1.7% of total assets

Chief Executive Officer Jack Zoeller stated, "We launched a fresh round of growth in the first quarter in anticipation of the $15.4 million capital raise that closed in early April. While we incurred a modest quartlerly loss primarily due to one-time factors and timing differences related to compensation, additions to staffand loan loss reserves, Cordia remains focused on its strategy to grow both our geographic footprint and earnings base." Cordia recently announced plans to open two new full-service branches in Chesterfield County and Colonial Heights, Virginia.

Financial Highlights

Asset Growth. Total assets were $280.3 million at March 31, 2014, compared to $235.1 million at December 31, 2013. During the first three months of 2014 the Company originated $11.7 million of new organic loans and also purchased $26.5 million of student loans 98% guaranteed by the U.S. Department of Education.

Deposit Growth and Mix. Total deposits increased to $235.0 million at March 31, 2014, compared to $210.8 million at December 31, 2013. Total checking, money market and savings accounts increased 16%, to $96.5 million at March 31, 2014, from $83.5 million at December 31, 2013.

Net Interest Income. Net interest income after provision for loan losses was $1.9 million in the first quarter of 2014, compared to $2.1 million in the first quarter of 2013.

Asset Quality. Asset quality continued to improve, with total non-performing assets decreasing to $4.8 million, or 1.7% of assets, at March 31, 2014, from $5.5 million, or 2.3% of assets, at December 31, 2013. There were no delinquencies in the Company's organic loan portfolio at March 31, 2014.

Tangible Book Value. Tangible book value per share decreased to $4.63 at March 31, 2014, from $4.72 at December 31, 2013.

Deferred Tax Asset. As of March 31, 2014, the Company had net deferred tax assets totaling $6.9 million. Upon a determination that realizing the full deferred tax asset is more likely than not, $6.2 million of valuation allowance may be reversed. Cordia anticipates that such a determination may potentially be made near the end of 2014.

Operating Results

Cordia reported a net loss of $284,000 or $(0.10) per share for the first quarter of 2014, compared to net income of $222,000 or $0.08 per share for the first quarter of 2013.

Net interest income after the provision for loan losses was $1.9 million for the first quarter of 2014, compared to $2.1 million for the first quarter of 2013, or a decrease of $230,000. Net interest margin was 3.34% and 4.31% for the first quarter of 2014 and 2013, respectively. The decrease in net interest margin was primarily the result of a decrease of $617,000 in the amount of accretion income on purchased loans in 2014 compared to 2013. Excluding the decrease in the accretion income, interest income on loans held for investment increased by $187,000 due to an increase in average balances of $46.5 million offset by a 47 basis point decrease in average yield. Cordia's cost of deposits, adjusted to exclude accretion income, decreased 15 basis points while total deposits increased $9.3 million. The net interest margin, adjusted for accretion income, increased from 2.83% to 3.18% or 35 basis points.

Noninterest income increased to $123,000 for the first quarter of 2014, compared to $67,000 for the first quarter of 2013. The increase was driven by a net gain on the sale of available for sale securities of $64,000.

Noninterest expense increased to $2.3 million for the first quarter of 2014, compared to $2.0 million for the first quarter of 2013. This increase was primarily due to a one-time accrual of incentive compensation and the costs of staff additions associated with Cordia's growth.

About Cordia Bancorp

Cordia Bancorp Inc. is a public bank holding company founded in 2009 seeking to invest in undervalued community banks and pursue organic and strategic growth in the Mid-Atlantic banking market. Substantially all of the assets of Cordia consist of its investment in Bank of Virginia. Bank of Virginia provides retail banking services to individuals and commercial customers through four full-service and two ATM-only banking locations in the greater Richmond market, including Chesterfield and Henrico Counties and Colonial Heights, Virginia.

This news release may include forward-looking statements. These forward-looking statements are based on current expectations that involve risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may differ materially. These risks include: changes in business or other market conditions; the timely development, production and acceptance of new products and services; the challenge of managing asset/liability levels; the management of credit risk and interest rate risk; the difficulty of keeping expense growth at modest levels while increasing revenues; and other risks detailed from time to time in the Company's periodic filings with the Securities Exchange Commission. Pursuant to the Private Securities Litigation Reform Act of 1995, the Company does not undertake to update forward-looking statements contained within this news release.

Cordia Bancorp

Consolidated Balance Sheets (unaudited)

March, 31

Dec. 31,

Sept. 30,

June 30,

March 30,

(Dollars in thousands, except per share data)

2014

2013

2013

2013

2013

Assets

Cash and due from banks

$ 10,499

$ 5,290

$ 6,893

$ 3,756

$ 5,340

Fed funds sold and Interest-bearing deposits

16,839

8,694

15,889

27,766

9,201

Total cash and cash equivalents

27,338

13,984

22,782

31,522

14,541

Securities available for sale, at fair value

24,464

24,567

29,807

22,105

17,182

Securities held to maturity

14,500

14,753

--

--

--

Restricted securities

1,529

1,074

1,071

1,134

1,124

Loans held for investment:

Commercial real estate

85,084

82,602

85,962

80,289

78,405

Commercial and industrial

22,118

21,208

20,388

21,273

23,384

Guaranteed student loans

80,966

55,427

51,293

52,957

34,696

Consumer and other

16,914

14,770

15,146

13,960

14,712

Total loans held for investment

205,082

174,007

172,789

168,479

151,197

Less: Allowance for loan losses

(1,504)

(1,489)

(1,517)

(1,562)

(1,583)

Net loans held for investment

203,578

172,518

171,272

166,917

149,614

Loans held for sale

--

--

--

--

59,761

Premises and equipment, net

4,430

4,464

4,512

4,287

4,327

Accrued interest receivable

2,177

1,655

1,335

1,132

1,097

Other real estate owned, net of valuation allowance

1,543

1,545

1,545

1,768

1,768

Other assets

697

588

648

655

953

Total assets

$ 280,256

$ 235,148

$ 232,972

$ 229,520

$ 250,367

Liabilities and stockholders' equity

Non-interest bearing deposits

21,642

22,845

21,719

21,338

20,786

Savings and interest bearing demand deposits

74,825

60,685

59,546

49,493

80,665

Time deposits, $100,000 and greater

87,559

76,231

75,023

79,795

70,080

Other time deposits

51,002

51,053

52,620

54,732

54,202

Total deposits

235,028

210,814

208,908

205,358

225,733

Accrued expenses and other liabilities

12,202

1,047

897

998

1,361

FHLB borrowings

20,000

10,000

10,000

10,000

10,000

Total Liabilities

267,230

221,861

219,805

216,356

237,094

Preferred stock

--

--

--

--

--

Common stock

28

28

28

28

28

Additional paid-in-capital

18,672

18,648

18,606

18,579

18,689

Retained deficit

(5,289)

(5,005)

(5,011)

(5,219)

(5,479)

Accumulated other comprehensive income

(385)

(384)

(456)

(224)

35

Total stockholders' equity

13,026

13,287

13,167

13,164

13,273

Total liabilities and stockholders' equity

$ 280,256

$ 235,148

$ 232,972

$ 229,520

$ 250,367

Cordia Bancorp

Consolidated Statements of Income (unaudited)

Three Months Ended

March 31,

Dec. 31,

Sept. 30,

June 30,

March 31,

(Dollars in thousands, except per share data)

2014

2013

2013

2013

2013

Interest Income

Interest and fees on loans

$ 2,149

$ 2,089

$ 2,182

$ 2,516

$ 2,579

Investment securities

207

161

123

72

70

Interest on federal funds sold and deposits with banks

6

10

19

29

15

Total interest income

2,362

2,260

2,324

2,617

2,664

Interest Expense

Interest on deposits

426

412

415

426

391

Interest on FHLB Borrowings

41

40

42

41

41

Total interest expense

467

452

457

467

432

Net interest income

1,895

1,808

1,867

2,150

2,232

Provision for (benefit from) loan losses

20

(92)

(23)

7

127

Net interest income after provision for loan losses

1,875

1,900

1,890

2,143

2,105

Non-interest income

Service charges on deposit accounts

26

40

31

29

32

Net gain on sale of available for sale securities

64

--

--

--

--

Other fee income

33

46

51

36

35

Total non-interest income

123

86

82

65

67

Non-interest expense

Salaries and employee benefits

1,406

1,066

991

974

1,185

Professional services

106

161

67

211

62

Occupancy

151

138

137

145

145

Data processing and communications

142

139

140

144

125

FDIC assessment and bank fees

123

111

116

114

120

Loan expenses

126

76

81

102

15

Other real estate expenses

5

16

5

12

16

Gain on sale of OREO

--

--

(36)

--

--

Supplies and equipment

75

75

66

64

69

Insurance

41

40

42

42

42

Directors fees

16

32

34

38

34

Marketing and business development

6

32

19

15

22

Other

85

95

102

86

115

Total non-interest expense

2,282

1,981

1,764

1,947

1,950

Consolidated net income (loss) before non-controlling interest

(284)

5

208

261

222

Net income (loss)

(284)

5

208

261

222

Earnings per share, basic and diluted

$ (0.10)

$ --

$ 0.07

$ 0.09

$ 0.08

Weighted average shares outstanding, basic and diluted

2,788,302

2,788,302

2,775,802

2,775,802

2,778,677

Cordia Bancorp

Consolidated Financial Highlights (unaudited)

As of and for the Three Months Ended

March 31,

Dec. 31,

Sept. 30,

June 30,

March 31,

(Dollars in thousands, except per share data)

2014

2013

2013

2013

2013

Results of Operations

Interest income

$ 2,362

$ 2,260

$ 2,324

$ 2,617

$ 2,664

Interest expense

467

452

457

467

432

Net interest income

1,895

1,808

1,867

2,150

2,232

Provision (benefit) for loan losses

20

(92)

(23)

7

127

Net interest income after provision for loan losses

1,875

1,900

1,890

2,143

2,105

Non-interest income

123

86

82

65

67

Non-interest expense

2,282

1,981

1,764

1,947

1,950

Net income

$ (284)

$ 5

$ 208

$ 261

$ 222

Earnings per share, basics and diluted

$ (0.10)

$ --

$ 0.07

$ 0.09

$ 0.08

Weighted average shares outstanding, basic and diluted

2,788,302

2,788,302

2,775,802

2,775,802

2,778,677

Performance Ratios

Return on average assets

-0.47%

0.01%

0.35%

0.41%

0.42%

Return on average equity

-8.52%

0.15%

6.39%

7.88%

6.34%

Return on average tangible equity

-8.61%

0.15%

6.46%

7.97%

6.42%

Efficiency ratio

113.08%

104.59%

90.51%

87.90%

84.82%

Yields and Rates

Yield on loans

4.88%

4.82%

5.11%

5.55%

6.66%

Yield on securities

2.08%

2.14%

1.79%

1.70%

1.56%

Yield on interest earning assets

4.16%

4.13%

4.09%

4.23%

5.14%

Cost of interest bearing deposits

0.88%

0.89%

0.88%

0.82%

0.92%

Cost of total deposits

0.79%

0.80%

0.79%

0.75%

0.83%

Cost of borrowings

1.62%

1.60%

1.68%

1.64%

1.64%

Cost of interest bearing liabilities

0.92%

0.93%

0.92%

0.86%

0.96%

Interest rate spread

3.25%

3.21%

3.17%

3.38%

4.18%

Net interest margin

3.34%

3.30%

3.29%

3.48%

4.31%

Capital

Total equity to total assets

4.65%

5.65%

5.65%

5.74%

5.30%

Tangible equity to total assets

4.60%

5.59%

5.59%

5.67%

5.24%

Book value per share

4.67

4.77

4.74

4.74

4.78

Tangible book value per share

4.63

4.72

4.69

4.69

4.72

Common shares outstanding

2,788,302

2,788,302

2,775,802

2,775,802

2,778,677

Average Balances

Loans

176,161

173,536

170,969

181,373

154,799

Securities

39,747

30,156

27,509

16,922

17,904

Earning assets

226,968

218,707

227,110

247,283

207,299

Total assets

241,660

231,435

235,067

254,765

213,728

Interest bearing deposits

193,946

184,920

188,526

208,433

170,621

Total deposits

215,721

206,981

210,395

228,571

189,147

FHLB borrowings

10,111

10,000

10,000

10,000

10,000

Interest bearing liabilities

204,057

194,920

198,526

218,433

180,621

Total equity

13,332

13,266

13,027

13,254

14,006

Tangible equity

13,196

13,123

12,875

13,093

13,836

Asset Quality

Net charge-offs

5

(65)

22

28

661

Net charge-off rate

0.01%

-0.15%

0.05%

0.06%

1.71%

Non-performing loans

3,225

3,934

4,054

3,980

4,490

Non-performing assets

4,768

5,479

5,599

5,748

6,258

Allowance for loan losses

1,504

1,489

1,517

1,562

1,583

Non-performing loans as a % of total loans held for investment

1.57%

2.26%

2.35%

2.36%

2.97%

Non-performing assets as a % of total assets

1.70%

2.33%

2.40%

2.50%

2.50%

Allowance for loan losses as a % of total loans held for investment

0.73%

0.86%

0.88%

0.93%

1.05%

Allowance for loan losses as a % of non-performing loans

46.64%

37.85%

37.42%

39.25%

35.26%

Cordia Bancorp

GAAP to Non-GAAP Reconciliations (unaudited)

The table below show the computations of tangible equity and tangible assets and certain related ratios, all of which are considered to be non-GAAP financial measures. The tangible equity to tangible assets ratio has become a focus of some investors and management believes this ratio may assist in analyzing the Corporation's capital position, absent the effects of intangible assets. These non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation, or as substitute for analysis of results reported under GAAP. Because not all companies use identical calculations, the non-GAAP measures presented in the following table may not be comparable to those reported by other companies.